Correlation Between Dyandra Media and Capital Financial

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Can any of the company-specific risk be diversified away by investing in both Dyandra Media and Capital Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dyandra Media and Capital Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dyandra Media International and Capital Financial Indonesia, you can compare the effects of market volatilities on Dyandra Media and Capital Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dyandra Media with a short position of Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dyandra Media and Capital Financial.

Diversification Opportunities for Dyandra Media and Capital Financial

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Dyandra and Capital is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dyandra Media International and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial and Dyandra Media is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dyandra Media International are associated (or correlated) with Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Dyandra Media i.e., Dyandra Media and Capital Financial go up and down completely randomly.

Pair Corralation between Dyandra Media and Capital Financial

Assuming the 90 days trading horizon Dyandra Media International is expected to under-perform the Capital Financial. But the stock apears to be less risky and, when comparing its historical volatility, Dyandra Media International is 1.8 times less risky than Capital Financial. The stock trades about -0.1 of its potential returns per unit of risk. The Capital Financial Indonesia is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  57,000  in Capital Financial Indonesia on December 29, 2023 and sell it today you would lose (4,500) from holding Capital Financial Indonesia or give up 7.89% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Dyandra Media International  vs.  Capital Financial Indonesia

 Performance 
       Timeline  
Dyandra Media Intern 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Dyandra Media International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Dyandra Media is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Capital Financial 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Capital Financial Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Dyandra Media and Capital Financial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dyandra Media and Capital Financial

The main advantage of trading using opposite Dyandra Media and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dyandra Media position performs unexpectedly, Capital Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capital Financial will offset losses from the drop in Capital Financial's long position.
The idea behind Dyandra Media International and Capital Financial Indonesia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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